In this Fox News Sunday Show With Chris Wallace: Rep. Paul Ryan on bipartisan budget deal; Where does the nation stand one year after Newtown?

WALLACE: It’s been a long time, but there was actually a spirit of compromise on Capitol Hill this week. The House passed a bipartisan budget agreement which the Senate is also expected to approve next week.

But for all of the good cheer, there was plenty of criticism, especially from the right.

WALLACE: Your budget deal has opened an even bigger split inside the Republican Party between the House Republican leaders, who supported the compromise, and outside Tea Party groups, who opposed it, some before it was even announced.

Here was House Speaker Boehner this week.

(BEGIN VIDEO CLIP)

BOEHNER: The day before the government reopened, one of the people that — one of these groups stood up and said, well, we never really thought it would work.

Are you kidding me?

(END VIDEO CLIP)

WALLACE: Are you getting fed up with these outside groups who talk tough from the sidelines?

RYAN: Look, I think John just got his Irish up there. I think these groups are valuable. The way I look at it is this — they’re part of our conservative family. I’d prefer to keep these conversations within our family. John was frustrated because they came out against our agreement before we even reached an agreement. I was frustrated about that, as well. But I see the Tea Party as indispensable, invaluable in helping keep the taxpayer in the game, keep Washington accountable. And when I look at, when we lost our majority in ’06, we deserved to lose it then. They helped us get out ship righted again by being fiscally conservative.

And I think what we’re doing here today, we’ve got two thirds of the House conservatives voting for this. I think this is a step in the right direction. It’s not as far as I want to go, but it’s a step in the right direction.

WALLACE: But you’re also taking heat not just from outside groups, you’re also taking heat from some fellow Republicans in Congress, including — and one might say especially — some potential rivals for the 2016 presidential nomination.

Here was Senator Marco Rubio.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: It raises it by $60 billion, the spending, but it pays it over 10 years. Well, you know how that works. I mean, over the next couple of years, they’ll forget it. And they’ll keep borrowing more.

(END VIDEO CLIP)

WALLACE: What do you say back to Marco Rubio?

RYAN: Well, I would — I would love to talk to him about it. He — Marco is a good friend of mine. I disagree with him respectfully. We are making permanent law changes, permanent spending cuts, and those savings accrue and accumulate and compound over time.

So not only are we doing $85 billion of savings from auto-pilot spending that’s permanent, we’re paying for $63 billion of sequester relief, half of it going to defense. We’re maintaining 92 percent of the sequester in this deal. And we’re preventing two government shutdowns from possibly occurring next year.

WALLACE: OK, let’s look at the deal. And I want to put up some numbers on the screen, some of which you just mentioned.

You bust the sequester caps and increase spending by $62 billion over the next two years.

RYAN: Can I get you right there for a second?

(CROSSTALK)

WALLACE: Let me finish —

RYAN: OK, all right.

WALLACE: — and then you can —

RYAN: All right. You got it.

WALLACE: — you can do redo all the math. I’ll probably make several mistakes.

While you reduce — reduce deficits by $85 billion over the next 10 years, for a net deficit reduction of $23 billion.

The biggest complaint is that you’re trading definite spending increases right now —

RYAN: Right.

WALLACE: — in return for the promise of deficit reduction, as one critic put it, during Hillary Clinton’s second term.

(LAUGHTER)

RYAN: Well, let’s hope that that never happens.

OK, here’s my issue. We’re not busting sequester caps. In just the next two years, 70 percent of the sequester is intact —

WALLACE: But $60 billion more is going to be spent.

(CROSSTALK)

RYAN: That’s right. Ninety-two percent of the sequester over the life of the sequester is intact. The Democrats came to this saying get rid of the entire sequester. And we’ve now got them to agree to 70 percent of it now and 92 percent of it exists over the term of the deal, 0.1 and 0.2.

As I mentioned before, changing entitlements, changing what we call mandatory spending, that’s the auto-pilot part of government, those are permanent law changes. We are permanently asking federal workers to contribute more to their pensions so that the hard-working taxpayers who pay for those pensions don’t have to pay as much.

And in order to stop those savings, if, God forbid, we have a Hillary Clinton second term, a new Congress would have to change a new law to prevent that from happening, because we’re doing permanent law.

But that’s the point I’m trying to make is —

WALLACE: But — but the —

RYAN: — look at the details, I say to those who are criticizing it. This is keeping our principle intact. No tax increases, net deficit reduction, permanent spending cuts in place of the across the board approach.

WALLACE: But the criticism is — and you’ve heard it. I said you bust the sequester cuts. You say, well, we don’t bust them, but you let it leak.

RYAN: Yes.

WALLACE: I mean, there’s a break in the sequester caps —

RYAN: And we put relief to the sequester —

(CROSSTALK)

WALLACE: You spend $60 billion more than you would have under the sequester.

RYAN: That’s right. That’s right.

WALLACE: And the sequester, a lot of people feel, has imposed real budget discipline. And the critics say you’re going back to the days of spending more and taxing more, because there is new revenue —

RYAN: There’s no taxes in this.

(CROSSTALK)

RYAN: There’s no taxes in this. There are some user fees, which say, let’s have the user pay for the government services they use, instead of the taxpayer who doesn’t use those services.

A person gets on a plane, why don’t they pay for their security instead of the person who never gets on a plane paying for that?

Those are the kinds of things we’re saying here.

Look, this is divided government, Chris. The budget that we passed in the House in March is what we want and what we’re going for. That balance of the budget that pays off the debt entirely, it — it’s our vision, it’s our goal.

That’s where we ultimately want to go. This doesn’t substitute for that. This is a small step in direction for that. I’m not going to oversell this as an enormous budget accomplishment. It’s not.

But it’s important that it prevents government shutdowns. It’s important that it rejects tax increases.

WALLACE: OK —

RYAN: It’s important that we set a precedent. The Budget Control Act said one for one, one dollar of mandatory for one dollar of discretionary. This goes beyond that.

So we go beyond the law that —

WALLACE: OK. I want to talk to you about the shutdowns —

(CROSSTALK)

WALLACE: You say, and quite rightly so, and I think it’s a big accomplish, you removed the threat of government shutdowns for almost the next two years.

On the other hand, we’ve got a debt limit crisis —

RYAN: That’s right.

WALLACE: — which is going to come up in the next couple of months, February and March, people are saying.

Should Republicans risk a default crisis?

As you know, the president will say, well, you’re going to send the country into a default by demanding more progress on spending and the deficit or do you just cave there and say, hey, look, we’re going to just kick this can down the road and focus on ObamaCare?

RYAN: Look, one — one step at a time, Chris. We — Patty and I knew that we weren’t going to solve —

WALLACE: Patty Murray, your —

RYAN: Yes, Patty Murray. I’m sorry.

WALLACE: Yes.

RYAN: Patty Murray and I knew we weren’t going to solve every problem like the debt limit problem. So we sought to find common ground to solve this problem, this problem being a shutdown possibly in January and then another shutdown possibly in October.

And we got our principles established here.

(CROSSTALK)

RYAN: We’ve got cut the deficit —

(CROSSTALK)

WALLACE: Sir, I understand, but the question is, are you going to demand more in return for raising the deficit?

RYAN: We as a caucus, along with our Senate counterparts, are going to meet and discuss what it is we want to get out of the debt limit. We don’t want nothing out of this debt limit. We’re going to decide what it is we can accomplish out of this debt limit fight.

One of the problems or concerns I have with the debt limit is we don’t know when it’s going to hit.

Jack Lew, the treasury secretary, has ultimately discretion on when this could occur. So, the timing of this is very much in doubt.

So we’re going to meet in our retreats after the — after the holidays and discuss exactly what it is we’re going to try and get for this.

WALLACE: In the bill that the House passed, the Republicans extend the so-called doc-fix. You avoid a major cut in reimbursement to doctors —

RYAN: Right.

WALLACE: — who treat Medicare patients. You extend that for three months.

On the other hand, you do absolutely nothing to extend unemployment benefits for the 1.3 million Americans who will lose it right after Christmas. And Democrats say that shows just exactly what’s wrong with Republican priorities.

RYAN: Well —

WALLACE: You care more about doctors than you do about the unemployed.

RYAN: Look, this was brought to this package with pay-fors, meaning spending cuts to pay for that doc-fix. When they, at the 11th hour, asked for this unemployment extension, they offered nothing in — to pay for it, which would have blown a hole in our deficits. That’s point one.

Point two, a 13th extension of this emergency unemployment extension from the 2008 crisis, we have a lot of evidence showing that it will prolong unemployment.

Our focus is getting people back to work, Chris. We want jobs. And we want pro-growth policies that help create jobs so we don’t have people going on unemployment in the first place.

One of the things we think this accomplishments by providing some certainty, by preventing the government shutdowns, is it can get the economy growing again.

So, our focus is on job creation, not a 13th extension of an emergency benefit that was started in 2008.

WALLACE: All right. Thirty seconds left. You and Patty Murray sat down. You arrived at this deal. You say it — I mean, it’s a first step, but it’s obviously no grand bargain.

RYAN: That’s right.

WALLACE: Do you come away, in 30 seconds, thinking a grand bargain is possible or that the differences on basic principles, entitlement cuts, tax revenue increases, just too big?

RYAN: Chris, I don’t think with this president or this Senate we’re going to have something like that. That’s why I think we need to win a couple of elections.

This, I believe, helps us better do that. It’s good for the country. It allows us to focus on our ObamaCare oversight. It allows us to focus on laying out our conservative vision in 2014.

We’re going to have to win the Senate and we’re going to have to win the White House to truly fix this country’s fiscal problems, because I don’t believe that this White House and this Senate — I don’t think they’re willing and able to do it.

WALLACE: Congressman Ryan, thank you so much for coming in today.

RYAN: Thank you.

WALLACE: And Merry Christmas to you.

RYAN: Merry Christmas.

WALLACE: And hello again from FOX News in Washington.

Well, no matter how many times we see the images, it’s still agonizing. Kids screaming out of school, hands raised, this time in Colorado, student opened fire on his high school, critically injuring a 17-year-old girl, before turning the gun himself. And it came as Newton, Connecticut, marks one year since the horrific shooting that took 26 lives at Sandy Hook Elementary.

One of the victims that day, Vicki Soto, a first grade teacher who was killed trying to protect her students from the shooter. The photo of her sister learning what happened has become our image of that day.

We’ll discuss where the gun debate stands with two people on opposite sides of the issue. First, my interview earlier with Vicki’s kid sister, Carlee.

SOTO: Taking it day by day. We have our bad days. We have our good days. It’s been a roller coaster (ph) every year, but most importantly, we’re just trying to take it day by day and deal with our feelings as they come.

WALLACE: And you say you have good days. What’s a good day?

SOTO: We just had a new little baby born in our family, so that was a good day. But it’s also sad because Vicki never got to meet Ms. Madeline Victoria.

WALLACE: Oh, named after her?

SOTO: Named after Vicki.

WALLACE: The picture you got on your cell phone has become our image of our heartbreak of that day. As we mark the first anniversary, how do you feel about that, that fact that you have to sort of dredge this up? Guys like me are asking you questions about it.

SOTO: I can remember everything that day, everything that somebody said to me. Every smell, every person, it’s so vivid to me.

WALLACE: The fact that it’s all being brought up again, is that hard for you?

SOTO: It’s very hard. I’m just trying to keep myself busy and think of our one year anniversary as just another day, because every day without Vicky is extremely hard. One year later, it’s just another day. To me, it’s just another day without my older sister by my side.

WALLACE: I want to ask you about that, because Vicky has been honored for her extraordinary courage that day, I mean, the fact that she literally put herself in front of the rifle to protect her first grade students. A school nearby has been renamed for her. She’s received one of this country’s highest awards.

But I’ve got to think, as her kid sister, that in a way, all of that doesn’t matter, you just miss her.

SOTO: I would give back everything just to have my older sister back. It’s amazing that our country has recognized my sister and the other give educators as heroes, because I know that my sister would have done anything to save more of her kids.

But because of my sister, 11 of her kids are able to have a future. They’re able to grow up and live their lives.

WALLACE: There was, of course, national outrage after Newtown, calls for more gun controls, especially a universal background check. I know you were in the Senate gallery the day the Senate voted that down.

How do you explain that and just generally, how do you explain the fact that a year later, nothing has happened?

SOTO: It was extremely hard to watch these members of Congress come in and vote no on something so sensible. It’s a background check and it only takes 90 seconds. It’s not preventing anyone that should not have a gun.

It was hard for that to happen and to see it happen. But like President Barack Obama told me, and Vice President Biden, that no one ever thought slavery would be abolished, no one ever thought women would have rights.

And I believe that we will have sensible gun laws in the future.

WALLACE: You recently joined the group Mayors Against Illegal Guns. And I know you’ve gone out around the country to — to argue for more gun controls. I’ve got to think that’s a tough thing for you, because I’ve got to think at least part of you would like to get as far away from all of this as possible.

SOTO: It is hard. There is definitely days where I don’t want to do this. I don’t want to speak on camera. I don’t want to talk in front of a group of people. But my sister can’t do that.

And there are so many people that can’t be advocates for this. And I know I can.

WALLACE: As we mark this first anniversary and think back to that — the horrible events of that day, what would you like us to remember about Vicky, about how she lived and how she died?

SOTO: My sister was an amazing person all around. She loved teaching and that’s all she wanted to do since the age of three. She wanted to be a teacher, just like her god mom.

And she did everything in her power to save those kids and I know that she wouldn’t have done anything differently.

It’s sad that I will never be able to have a conversation with my sister. But at the same time, I’m so thankful that she was able to save so many of her kids that were in that — in her classroom that day.

It’s hard, but I am so, so proud to say I am Victoria Soto’s little sister.

WALLACE: Well, Carlee, if I may, I just want you to know that we are all — all our thoughts and prayers go out to you and to your family, especially in this holiday season. And we’re just as proud of her as — as you are.

SOTO: Thank you very much.

(END VIDEOTAPE)

WALLACE: We want to bring in Mark Kelly, husband of former Congresswoman Gabby Giffords, who was critically injured in a mass shooting in Tucson, almost three years ago.

Since then, they started a group Americans for responsible solutions, to push for more gun controls.

Captain Kelly, I think I have to say you have not had much success this past year. Congress passed no major new gun legislation.

And let’s take a look at what the record is in the states. They passed 109 new gun laws, but two thirds of them loosen restrictions, not tighten them.

How do you explain it?

KELLY: Well, I mean, I think you chalk it up to politics and influence that certain organizations have on members of Congress in Washington. So, we haven’t had much success there in D.C. We have to have success around the country.

Now, you point out that it’s two thirds where it loosens some gun laws, but in places like Colorado and Delaware, they passed expanded background check bills. And overtime, this is going to have a very positive effect, and we’ve had the recent races in Virginia, where this issue was discussed, not only around the state, but during the debates, and we saw success that as well.

WALLACE: Captain, is it true you’re focusing more now on the mental health side of this, from the gun control side, both better treatment and also more effectively reporting on people who have mental health problems for the federal background check?

KELLY: Well, Chris, this is a complicated issue. I mean, there isn’t one reason why we have such a horrendous rate of death from gun violence. So, it needs to be approached in a bunch of different ways. But I still strongly believe that the first thing we should do is require a background check before somebody can buy a gun to prevent people who are dangerously, mentally ill, or criminals. But you know the mental health aspect of this is significant as well.

WALLACE: You’re also focusing more now on politics, trying to change the map, as you put it. You and your wife, the former congresswoman, had set up a PAC, to lobby on the issue, to push the issue — a super PAC, rather, and also a PAC, to contribute money to candidates.

I guess the question is, do you really think that you can beat the gun lobby which in the first six months of the year outspent you 10 to one?

KELLY: Well, I don’t know if they outspent us 10 to one. I know in the race in Virginia you know, we spent about the same amount of money as the NRA did and you saw the results there.

But, you know, we don’t have to compete I think, you know, one to one with any organization. I think all we need to bring some balance to the equation, because for so long, there was really just the gun lobby who was communicating with the constituents of members of Congress. And now, that’s not the case anymore.

So, with a balance, we’re going to get people, we’re going to get members of Congress to think differently about their next election and then I think we’re going to see some real change.

WALLACE: You know, you talked — well, you have some success in passing laws in Colorado, but that’s only part of the story, because what happened is after the tougher gun legislation was passed, there was recall election.

WALLACE: And two top state Senate Democrats were recalled and forced out of office.

KELLY: Well, John Morse, before he took this issue on, he said this could cost his seat in the state Senate. And Angelo Giron had a tough district as well.

So, you know, they knew going in that this could affect their outcome and I truly believe that a recall should be not used for somebody who was doing their job. I think that’s a mistake. But it did happen.

But the reality, though, is the law is still the law of the land, and overtime, that background check law is going to have a positive effect in the state of Colorado.

WALLACE: Captain Kelly, you’re running a TV ad right now that shows scenes of the grieving after Newtown over the melody of “Silent Night.” Let’s play a clip of that now.

(VIDEO CLIP PLAYS, AMERICANS FOR RESPONSIBLE SOLUTIONS AD)

WALLACE: Captain, when you look back over the last year, the national outrage, initially over Newtown and then the lack of action, especially at the congressional level, do you honestly, do ever get discouraged?

KELLY: Yes, we get a little discouraged. Gabby and I do. I mean, what happened in April when the Manchin-Toomey bill was not passed, a bill that was supported by 92 percent of Americans, even 74 percent of NRA members support expanded background checks. And to see that fail, that was not a good day.

But we know that this is a tough fight. Politics is a difficult business. We’re in this for the long haul. And I am confident that over time, we’re going to be successful.

WALLACE: Captain Kelly, thank you for coming in today. Thank you for joining us, sir.

KELLY: You’re welcome.

WALLACE: Now for the other side of the gun debate. Larry Pratt is executive director of Gun Owners of America.

Mr. Pratt, do you see the failure to pass any new major gun legislation on the congressional level and not much on the state level, do you see that as a victory for gun rights?

LARRY PRATT, GUN OWNERS OF AMERICA: Well, Chris, we’re not really able to talk about a victory until we get rid of the laws that prohibit people from being able to protect themselves in schools and in other places.

Every one of our mass murders in our country has occurred in places where guns were prohibited.

WALLACE: So, what you’re saying is, it’s not a victory that you stopped more gun legislation, you want to see the legislation that’s out there rolled back?

PRATT: That is correct, Chris. The legislation is on the books is lethal. It is killing people. All of these gun free zones are murder magnets and we simply got to get rid of them.

It’s an illusion to think that somehow we’re going to be safer because we can’t have a gun in a particular area because the bad guy is going to have a gun.

WALLACE: How do you explain the fact that we had a huge national outrage after Newtown, and according to the polls, at least, 90 percent of Americans, including a lot of gun owners supported the idea of expanded background checks, and yet, almost nothing happened?

PRATT: Chris, I would dispute those polls. I don’t think 90 percent of Americans agree on anything. And from what we were finding, the notion that somehow gun owners were part of that 90 percent didn’t jive with what we found with our members, what the NRA found with their members. Gun Owners of America doesn’t put any credence in those polls. And the fact is, I don’t think the Congress did either, because they weren’t hearing that from their constituents.

WALLACE: Let’s talk about the problem, though, because when you see, and we have over the last year since Newtown, these continued acts of violence whether it was that shooting just on Friday in a Colorado high school, whether shootings in workplaces, or in other public places, shopping malls, how do we stop it?

I want to put what President Obama — he addressed the issue in his weekend media address, here’s what he had to say.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have to do more to keep dangerous people from getting their hands on a gun so easily. We have to do more to heal troubled minds.

(END VIDEO CLIP)

WALLACE: Mr. Pratt, how do you answer the president?

PRATT: The president is looking at it through the wrong end of the telescope. The problem is not how are we going to keep bad guys from getting guns, they’re going to get guns. The problem is, when are we going to stop good guys from having guns to be able to protect themselves so that when one of this dirt bag goes into a mall or a school, somebody is able to protect themselves and others by having with their own gun?

WALLACE: But let’s the case of the background check. You certainly would agree, wouldn’t you, that people that have a criminal record, people with history of mental illness shouldn’t have guns, correct?

PRATT: The idea is not to be able to keep bad guys from getting guns, because they’re going to get guns. The background check is futile. Something like 42 maybe last year of record were prosecuted for trying to buy a gun with a criminal record out of 11 million. It is not a crime fighting tool.

WALLACE: But —

PRATT: And to rely on the background check is not going to be effective. We’ve got to be able to protect ourselves, not rely on something like a background check.

WALLACE: But since it first came in, hundreds and thousands of people have been denied guns because they failed to check. I mean, I understand your points. Some of those are still going to be able to get guns. But a lot, particularly, you know, a fella who’s not a hardened criminal, and is just got a real mental problem, wouldn’t that maybe the different between his getting his hands on a gun and not getting his hands on one?

PRATT: If we’re really serious about people who got some kind of problem, mental or criminal, they ought to be in jail. We ought to put them in jail, not just to think that somehow saying you can’t get a gun, but going down the street, we’re not going to bother with you. That’s silly. That’s just really not a very good idea.

WALLACE: Finally, we have about a minute left. You just heard Mark Kelly. We’ve also heard Michael Bloomberg say that they’re going to spend $25 million in the next election cycle trying to elect people who are supporters of more gun controls.

Do you think this will be a big issue in the 2014 election?

PRATT: Well, I’m not sure that the amount of money that billionaire Bloomberg has is going to be effective. He outspent the candidates that won in Colorado enormously, and he lost.

So, I think the message is, we don’t like the arrogance of power, we don’t like the message that we ought to be disarmed as a way of fighting crime.

Mayor Bloomberg’s message is wrong, and he’s going to continue to lose.

WALLACE: Mr. Pratt, thank you. Thanks for coming in today, and giving us your side of this debate.